Please help - being taken to court - advice needed

[LuluBellaBlue]

Hi, really hoping someone can offer some advice here.

I was stupid enough to be a loan guarantor for someone for £7500, they have only ever made one payment on the loan and it is now in arrears of just over £9000.

Myself and the borrower are now being taken to court. I paid a solicitor to help write a defense statement to the court as I am disputing my liability due to the circumstances (long story and not relevant to the advice needed)

However I am trying to find out:

If I dispute it in court and lose - am I liable for the other parties legal fees? or would the total amount liable be the £9000 it is now.

If I lose as the guarantor am I liable for the full amount or does the judge split it between the guarantor and the borrower?

Has anyone ever heard of anyone or known anyone to have themselves removed as a guarantor?

Thank you in advance mumsnetters. I am in an awful position at the moment and just don't know what to do, I feel sick with worry about it.

[Bluntness100]

You should read the contract and seek legal advice, but I think you are liable for the whole amount as you legally said you'd pay it basically if they couldn't. That's what a guarantor is. In addition it's down to the court on fees but yes if they win you would normally pay their costs. If you have went guarantor it's likely they will win.

As such I'd maybe seek legal advice and look to see if you can come to some payment agreement.

[Bluntness100]

I also don't think uou can get yourself removed after they have defaulted. I really think you need to speak to a solicitor.

[LuluBellaBlue]

Hi Bluntness,
Thank you for the response.
I have sought legal advice, but the fees are rapidly mounting and I have asked the solicitors to pause at the moment before I incur anymore costs from them.
I was hoping to represent my case to the court and take a chance at proving I was lacking mental capacity at the time, but don't want to do this if it's only going to incur me more costs!
We offered them £7500 to settle (the original loan amount) however they are refusing and want to full amount including interest.

[prh47bridge]

Assuming you are in England or Wales, if the case is dealt with as a small claim you will be liable for the other side's court fees but not for any other legal costs. If it is not dealt with as a small claim you will have to pay their legal costs. The claim is below the small claims limit so it would be dealt with as a small claim unless the case is particularly complicated.

The judge will not split the amount between you and the borrower. It is likely you will have to pay the full amount if you lose.

[PersianCatLady]

I paid a solicitor to help write a defense statement to the court as I am disputing my liability due to the circumstances (long story and not relevant to the advice needed)

www.citizensadvice.org.uk/debt-and-money/help-with-debt/responsible-for-a-credit-debt/check-if-youre-responsible-for-a-credit-debt/
Have a look at this under the section - "If you couldn't understand what you were signing" and if you feel that applies to you then there are some contacts listed for advice.

[PersianCatLady]

I was hoping to represent my case to the court and take a chance at proving I was lacking mental capacity at the time, but don't want to do this if it's only going to incur me more costs!
I am sure that other people will be able to advise you on this but personally I think that representing yourself to prove that you lacked capacity is a bit of a contradiction.

Unless the lack of mental capacity was very brief then it would seem very odd to me that you were able to make a good case when representing yourself.

I hope that makes sense and you see what I mean.

[namechangedtoday15]

You need to see the loan agreement and guarantee. Although the claim is below the small claim threshold meaning even If you lost you would only have to pay a small amount of costs, the loan agreement and guarantee might set out that you are liable for legal costs.

[Viviennemary]

I think it would be worth getting in touch with the Citizens Advice Bureau and see what they suggest. At least their advice is free. I don't think it's a good idea to represent yourself under the circumstances. But if you are liable for the loan the CAB might be able to negotiate a payment plan for you. Hope you get help soon.

[CakeAndChocolate]

Personal guarantees are usually capped. Read through what the document says, there will be a maximum you can be asked to pay, which will include any fees/expenses.

Unfortunately the person/company that is owed money can choose whether to sue you or the original borrower for the money, if the court finds you liable then you will have to pay the full amount (up to the cap).

[LuluBellaBlue]

Hi everyone, Thank you so much for the advice. It's helped clear things up in my head. I have made an appointment with CAB and made a list of questions and possible routes to try.

I really appreciate the feedback!

I was in the midst of a breakdown when this happened, a crown court case was on-going and the husband and wife who are the loan borrowers also stole money from me - knowing I was diagnosed with PTSD and were my 'chosen adult/support' person to attend court and police meetings with me (whilst they stole and conned me!) which is why it's so hard trying to figure out what to do about the mess I find myself in now.